There are many determinants of stock performance. Corporate earnings, fiscal policy and interest rates can all influence the equity markets. But equity returns are also dependent on where we stand in the economic cycle.
Valid until the market close on July 31, 2018.
The S&P 500 closed June with a monthly gain of 0.48% after a gain of 2.16% in May. All three S&P 500 MAs are signaling "invested" and three of five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI), Vanguard REIT Index (VNQ), and PowerShares DB Commodity Index (DBC) — are signaling "invested".
Here is an advance preview of the monthly moving averages we track after the close of the last business day of the month. At this point, before the close on the last day of the month, all three S&P 500 strategies are signaling "invested" — unchanged from last month's triple "invested" signal. Three out of five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI), Vanguard REIT Index (VNQ), and PowerShares DB Commodity Index (DBC) — are signaling "invested", down from last month's triple "invested" signal.
The economic calendar is light, and the market week will be shortened. There is no holiday this week, but expect many participants to take off early for a long weekend. If interest remain above 3% on the ten-year note, that will be the focus.
Today, we are finding income with a margin of safety in certain industries where we believe the threat of disruption is overblown. This is not to suggest that these industries (which include advertising, automobiles and retail) will not face disruption, but rather that the magnitude - or the timing - of the threat may be overstated.
Markets began the year as they had been over much of 2017, but changed their tone over the quarter—volatility reemerged, interest rates rose, the dollar fell, and equity markets retreated.
The economic calendar has several of the most important reports. The managerial rosters will be back at full strength, perhaps after an extra day or two off. Investment committees will consider implications from Q1 results. Pundits will try to explain what it all means.
We maintain a neutral outlook for U.S. commercial real estate prices overall this year, following a 3% to 5% decline from their 2015 peak.
Don’t let this wave of stock-market volatility go to your head. The value of the companies in your portfolio doesn’t change by a positive or negative 5% three times a day.
The economic calendar is normal but featuring the monthly employment report. Usually that would be the focus, and it might become so by week’s end. Until the situation is clarified, the paramount question will be: Has the US ignited a trade war?